On August 25, 2023, Judge Georgette Castner of the United States District Court for the District of New Jersey dismissed with prejudice a putative class action asserting claims under the Securities Exchange Act against a company that supports and operates blockchain technologies and certain of its executives and investors.  Takata v. Riot Blockchain, Inc., No. 18-cv-2293, slip op. (D.N.J. Aug. 25, 2023), ECF No. 251.  The Court’s prior decision dismissing the action with leave to amend was the subject of our prior post.  As this was plaintiff’s third amended complaint and the Court determined that plaintiff still failed to adequately allege misrepresentations or scienter, the Court dismissed the action with prejudice.

On August 8, 2023, the United States Court of Appeals for the Eleventh Circuit affirmed the dismissal of a putative class action asserting claims under the Securities Exchange Act of 1934 against a direct-to-consumer marketing company and certain of its officers.  In re Tupperware Brands Corp. Sec. Litig., 2023 WL 5091802 (11th Cir. Aug. 8, 2023).  Plaintiff alleged that the company misrepresented its financial performance as a result of a fraudulent sales scheme orchestrated at the company’s subsidiary.  The Eleventh Circuit affirmed the lower court’s dismissal of plaintiff’s third amended complaint with prejudice, holding that plaintiff failed to allege scienter on the part of the makers of the challenged statements and failed to allege scheme liability.

On March 31, 2023, Judge John P. Cronan of the United States District Court for the Southern District of New York dismissed a putative class action asserting claims under the Securities Exchange Act of 1934 against a financial institution that offered certain Exchange Traded Notes (the “ETN”) linked to a natural gas price index. Gomez v. Credit Suisse AG, No. 22 Civ. 115 (JPC) (BCM), 2023 WL 2744415 (S.D.N.Y. Mar. 31, 2023).

On March 31, 2023, Judge Paul Crotty of the United States District Court for the Southern District of New York dismissed certain coordinated putative securities class actions asserting claims under the Securities Exchange Act of 1934 against two prime brokers after the collapse of a client family office affected stock prices of various publicly traded companies. Chew King Tan v. Goldman Sachs Grp. Inc., No. 21-cv-8413, slip op. (S.D.N.Y. Mar. 31, 2023). Plaintiffs alleged that defendants engaged in insider trading by using their knowledge of the family office’s financial condition to sell shares of certain companies in which the family office held concentrated interests before the price of those shares collapsed. The Court held that plaintiffs failed to establish insider trading either on a theory that defendants misappropriated material non-public information or on a tipper/tippee theory. However, the Court granted plaintiffs leave to file an amended complaint.

On December 3, 2018, the Supreme Court heard argument on an appeal in a case where a divided panel of the D.C. Circuit held that a defendant who did not “make” a misstatement within the meaning of Janus Capital Group v. First Derivative Traders, 564 U.S. 135, 142 (2011), nonetheless could be liable for participating in a “scheme” to defraud under Section 10(b) of the Exchange Act, SEC Rule 10-b5 promulgated thereunder, and Section 17(a) of the Securities Act, by disseminating with fraudulent intent a misstatement made by someone else.  See Lorenzo v. S.E.C., No. 17-1077.